YEREVAN (CoinChapter.com) — Global investors are set to put money into record-high stock markets, according to a survey by Bank of America Corp. In response to a question about which asset class would benefit most from reallocating money-market funds, 32% of respondents chose US stocks. Another 19% preferred global equities, while 25% opted for government bonds.
The survey, conducted from June 7 to 13, gathered responses from 206 participants managing $640 billion in assets. Results showed investors are the most optimistic since November 2021, with cash levels in money-market funds at a three-year low. Currently, cash funds hold about $6.1 trillion, according to Bloomberg data.
Long positions on major technology companies, known as the Magnificent Seven, including Microsoft Corp. and Nvidia Corp., have surged to 69%, marking one of the most crowded trades in history, according to the survey.
US stocks have reached all-time highs, driven by excitement around artificial intelligence and hopes that easing inflation will prompt the Federal Reserve to cut interest rates this year. A 15% rally in the S&P 500 this year has pushed the benchmark’s forward 12-month price-to-earnings ratio to 21. This is above the long-term average of 16, Bloomberg data shows.
Despite high valuations, several Wall Street strategists remain optimistic about the S&P 500’s outlook. Firms like Citigroup Inc. and Goldman Sachs Group Inc. have expressed positive views, foreseeing further growth in large-cap growth stocks. Interestingly, the Bank of America poll showed 41% of fund managers expect these stocks to continue driving the US market rally.
Moreover, big tech has been a significant contributor to the S&P 500’s gains this year, with Nvidia alone accounting for 34% of the index’s rally.
Notably, the optimistic sentiment among investors is supported by a substantial reduction in cash levels within money-market funds. This indicates confidence in the stock market’s potential for continued growth.
Above all, the detailed insights from the Bank of America survey provide a clear picture of investor sentiment and the factors influencing their decisions.
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